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To: Simprofié who wrote (6540)	6/5/2000 7:47:00 PM
From: Robert Utne	Read Replies (2) \| Respond to of 6570

More from the Korean Herald. Note, especially, last line. KSE launches probe into possible insider trade at LG The Korea Stock Exchange (KSE) announced last Saturday that it has embarked on a probe into possible insider trading by LG Group's major shareholders and other interested parties who bought large shares in LG Electronics (LGE) before the public disclosure of merger talks between LGE and LG Information and Communications. "The public disclosure of ongoing merger talks between LGE and LGIC prompted a close review," said a KSE official. KSE has been paying close attention to the trading activities after noticing that the LGE shares held by major shareholders and others connected with the company went up from 10.58 percent at the end of last year to 16.59 percent at the end of last month, the official explained. "The investigation will look into whether Koo Bon-moo, LG Group chairman, and others with special ties to the group who may have been aware of the merger negotiations engaged in insider trading," the official said. The Financial Supervisory Service will launch an investigation if suspicions of insider trading surface during the KSE review. Koo and other major shareholders in LGE have been buying up LGE shares worth about 200 billion won, enlarging LG Group's share in the electronics subsidiary. Despite the company's claim that the buying was part of the group's management strategy as LGE is one of the group's core companies, it begs the question why not even a single share in LG Chemical, a flagship company, was bought. Those who suggest insider trading point to that anomaly as proof that the group used undisclosed information with the intention to realize profits by cashing in on share price differences. Some industry watchers hold the view that the investigation is related to the current chaebol reform drive, pointing out that the insider trading probe could raise the issue of reform in the LG Group. Such speculation is based on the drastic reform measures at Hyundai Group, another chaebol group, which saw its founder and two sons step down from office. The government is suspected of having demanded strong reform measures at Hyundai, and some industry officials believe LG may be similarly dealt with. Compounding the problem for the LG Group is the growing public outcry at some of chaebol's business practices. Just last month, the People's Solidarity for Participatory Democracy, a major civic group, raised issue with LG Chemical buying shares of its unlisted affiliates at above-market prices. According to some market watchers, if allegations of insider trading are found to be true, the LG Group and its "ruling" family would be dealt a fatal blow.... Updated: 06/05/2000 by Kim Hoo-ran Korean Herald Staff reporter